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SoloPower's collectors are designed for easy installation on commercial rooftops. Credit: SoloPower

Silicon Valley-based solar company SoloPower is poised to draw a loan from the Department of Energy to expand its factory, a situation that’s drawing parallels to now-infamous Solyndra.

SoloPower tomorrow will officially open the first line of a thin-film solar manufacturing facility in Oregon which the company intends to expand using a $197 million loan guarantee. At full steam, the plant would be capable of producing its specialized solar collectors at a rate of 400 megawatts per year.

Brutal price competition in the global solar industry has pushed a number of manufacturers out of business or into dire financial straits. In addition to Solyndra, thin-film startup Abound Solar had to shut down after having drawn $70 million from a DOE loan. Even the largest government-backed Chinese manufacturers are struggling to make a profit because prices have plummeted so dramatically in the past three years and there's a glut of panels.

Does seven-year old SoloPower stand a chance? Rather than compete head-to-head on price against commodity silicon solar panels, it’s one hope is to attract buyers to its niche product.

SoloPower makes thin-film solar cells but rather than package them into a rigid panel, its solar collectors are flexible strips. These light-weight collectors are designed for commercial and industrial rooftops that can’t withstand the weight of conventional racks and panels.

The collectors can be installed quickly, with adhesives and tooling used in the roofing industry, and in a dense formation. That means the cost of energy from its panels per area compares favorably to competitors, according to the company.

The key is finding customers willing to pay a premium for its product, which could be difficult given the many options out there. Its collectors are also suitable for building-integrated photovoltaics, such as energy-harvesting awnings or the sides of tall buildings, but market has not yet materialized at scale.

Thin-film manufacturers, in general, are in a race against time to improve efficiency and lower manufacturing costs to keep pace with the industry's constantly-falling per-watt pricing. SoloPower's relatively new technology could make it more challenging to get banks to finance projects.

To receive the loan guarantee, SoloPower has to meet specific performance metrics, a company representative said. In addition to receiving state incentives to locate in Oregon, SoloPower has raised some $200 million from private investors.

The DOE provided loan guarantees to only three solar manufacturers—Solyndra, Abound Solar, and 1366 Technologies, which has not drawn on the loan. The bulk of the other loan guarantees in solar were for large-scale projects which are considered less risky.

With the political fall-out from Solyndra, SoloPower will attract lots of scrutiny from critics of the Loan Guarantee program. To survive and grow, the company will need a lot more than cash in the bank, though. As it makes the tricky transition from demonstration-scale production to commercial-scale manufacturing, it has little room for execution error.